Why direct counter-terrorism measures only may fail: An analysis of direct and preventive counter-terrorism measures

We present a two-agent, asymmetric-information game model featuring a terror organization (Org) and a defending state (State). The Org chooses an aggregate terror input. The State chooses the levels of preemptive measures and redress of grievances of the Org's population, respectively as direct and preventive counter-terrorism measures. Defining how the war on terror (WoT) may be "lost" or "won," we prove that it is impossible to win the WoT with preemptive measures only, if the marginal cost of these measures is increasing. The optimal response of the State to an increase in terrorism is to increase preemption and grant more grievance redress.